Exhibit
      10.2 - Consulting Agreement for Vincent J. Arnone dated April 30,
      2008

    


    Dear
      Vince:

    


    The
      following is an agreement (this “Agreement”) which sets out the mutual
      understanding between Fuel Tech, Inc. (the “Company”) and you as to the terms
      and conditions of your engagement as a consultant to the Company subsequent
      to
      your resignation as an employee and Senior Vice President, Treasurer and Chief
      Financial Officer of the Company, all of which have been discussed between
      us on
      amicable terms. If you are in accord with these terms and conditions, please
      sign below where indicated. 

    


    1.
      Resignation. You have simultaneously with the execution of this Agreement
      delivered your signed resignation to the Company as referenced above, and
      resignations of all directorships in Company affiliates worldwide, to be
      effective on the close of business May 31, 2008 (the “Effective Date”).


    


    2.
      Consultancy. The Company hereby engages you to act as a consultant to it from
      the Effective Date to provide advice and assistance in matters relating to
      the
      Company as requested and directed by the President and CEO. In performing such
      consultancy services you will, at the Company’s reasonable request from time to
      time, for a minimum of 40 hours per month during the Term of this Agreement
      make
      yourself available in person at the Company’s Illinois offices or at such other
      location as the Company requests.

    


    3.
      Term.
      This Agreement shall expire and your consultancy shall terminate at the close
      of
      business, September 30, 2008 (the “Termination Date”). For all purposes
      hereunder, your consultancy services may only be deemed unsatisfactory if you
      intentionally fail to provide services as reasonably requested. 

    


    4.
      Compensation. In consideration of your consultancy services hereunder during
      the
      Term, the Company shall compensate you as follows:

    


    (a)
      Cash:
      The Company shall pay you each month, the basic rate of $10,000 per month,
      payable in two installments of $5,000 on or about the 1st and 15th of each
      month
      during the Term, and, for time spent on such consulting services in any month
      in
      excess of 40 hours, at the additional rate of $200 per hour, against your
      invoices detailing such time spent.

    


    (b)
      Pro-Rated CIP: Upon successful completion of your consultancy services hereunder
      through the period ending September 30, 2008 and in lieu of continued
      participation in the Corporate Incentive Plan (“CIP”), the Company will pay you
      a cash settlement of $67,500 which is calculated based on the proration of
      a
      salary of $225,000 times a 40% Target Incentive Participation and times 75%
      representing nine rather than 12 months participation in the CIP.

    


    (c)
      Accelerated Vesting of Options: The Company shall vest, i.e. allow to be
      exercised by you, effective at the close of business on the Termination Date,
      so
      much of your Company stock option awards of December 7, 2004, December 6, 2005
      and December 7, 2006 as are scheduled to vest on December 6 and 7, 2008, all
      such accelerated vested options aggregating 41,250 shares, as illustrated by
      Schedule A attached. Other options illustrated on Schedule A which are not
      vested and not given accelerated vesting in this Section 3 (c) shall be
      forfeited by you to the Company in accordance with the terms of such
      options.

    


    (d)
      Extended Option Exercise: Following satisfactory completion of your consultancy
      on the Termination Date, all of your then vested and exercisable options,
      including those referenced in Section 3(c) above, and including those that
      are
      vested as of the Effective Date and that would have expired thirty days after
      the Effective Date would it not be for this agreement, shall be able to be
      exercised by you until the close of business on October 1, 2009 (the “Extended
      Exercise Date”). It is understood that you shall be required to pay, or make
      provision for, the exercise price and Federal and State income tax and payroll
      taxes in connection with any exercise of options. 

    


    (e)
      Expense Reimbursement. The Company shall reimburse you for your ordinary and
      necessary expenses incurred in the discharge of your consultancy hereunder;
      provided, however, that any single expenditure in the amount of $500 or more
      shall be approved in advance by the Company and your commuting expenses from
      your home to the Company’s Illinois offices shall not be reimbursed.


    


    5.
      Reporting. In performing your consultancy services you shall report to John
      F.
      Norris Jr., Chief Executive Officer. 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.
      Mutual
      Releases. You and the Company hereby mutually remise, release and forever
      discharge one another of and from all claims whatsoever previously arising
      which
      one party hereafter may raise against the other with respect to matters arising
      prior to the date of this Agreement. Excluded, however, from these releases
      are
      (a) claims by you against the Company for previously accrued and unpaid wages
      and vacation pay through the Effective Date; your 401(k) account and such health
      and welfare benefits as may be due to you as a former employee of the Company
      under the Company’s written plans and policies, including COBRA health benefits
      concerning which you shall receive information separately from this Agreement;
      and (b) claims by the Company against you arising out of a breach of your
      undertakings in your Employment Agreement with the Company of May 22, 1999
      (the
“Employment Agreement”) to the extent that such undertakings are intended in the
      Employment Agreement to survive your resignation, it being understood that
      it is
      not intended by this Agreement and these mutual releases to revoke such
      undertakings. 

    


    7.
      No
      Disparagement. While neither you nor the Company anticipates any set of
      circumstances where it might occur, nevertheless, you and the Company agree
      not
      to disparage one another to any third party orally or in writing. 

    


    8.
      References. So long as you shall not be in breach of your undertakings in this
      Agreement or the Employment Agreement, the Company shall provide to such parties
      to whom you may subsequently apply for employment, a favorable reference
      concerning your employment with the Company.

    


    9.
      16a
      Reports. You understand that you are required for a period of six (6) months
      following the Effective Date to file 16a SEC reports of your sales and purchases
      of Company 1934 Act registered securities and that, at the end of such six
      month
      period, you shall file a Form 4 SEC report which shall be designated as a “final
      report.” The Company agrees to assist you in making these filings and all costs
      will be borne by the Company. 

    


    10.
      Assignment. This Agreement is personal to the parties and may not be transferred
      or assigned by a party absent the express written advance consent to such
      transfer or assignment by the other party granted in its absolute discretion
      and
      any assignment without such consent shall be null and void. 

    


    11.
      Integration; Modification. This Agreement is the entire expression of our
      agreement as to your resignation and consultancy and may not be modified or
      amended except by a writing signed by you and the Company referring to this
      Agreement and stating that it is an amendment or modification of this
      Agreement.

    


    12.
      Law;
      Dispute Resolution. This Agreement shall be construed and enforced according
      to
      the internal laws of the State of Illinois without giving effect to the
      conflicts of laws rules of any state. Any dispute between the parties or claim
      raised by one against the other shall be determined in arbitration according
      to
      the terms of Sections 8 and 9 of the Employment Agreement, it being intended
      by
      the parties that such terms are incorporated by reference into this Agreement
      and shall be as fully effective as if set out in this Agreement. You furthermore
      waive any claim to trial by jury, in the event that any dispute between you
      and
      the Company or any claim raised by one against the other shall nevertheless
      be
      determined in a judicial proceeding. 

     

    Schedule
      A

     

    
      	 	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
              Options that are 

            	
               

            	
              Options that will be 

            	
               

            	
               

            	
               

            
	
              Option 

            	
               

            	
              Quantity 

            	
               

            	
               

            	
               

            	
              Options 

            	
               

            	
              Quantity 

            	
               

            	
              Scheduled to vest on

            	
               

            	
              Forfeited on December 6-7, 2008

            	
               

            	
               

            	
               

            
	
              Grant 

              Date

            	
               

            	
              of Options 

              Issued

            	
               

            	
              Quantity 

              Exercised

            	
               

            	
              Vested 

              at 12/31/07

            	
               

            	
              Not Vested 

              at 12/31/07

            	
               

            	
              December 6-7, 

              2008

            	
               

            	
              Vesting in 

              2009

            	
               

            	
              Vesting in 

              2010

            	
               

            	
              Total

            	
               

            
	
              12/09/03

            	 	 	
              20,000

            	 	 	
              15,000

            	 	 	
              5,000

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 
	
              12/07/04

            	 	 	
              40,000

            	 	 	
              15,000

            	 	 	
              15,000

            	 	 	
              10,000

            	 	 	
              10,000

            	 	 	
              0

            	 	 	
              0

            	 	 	
              10,000

            	 
	
              12/06/05

            	 	 	
              45,000

            	 	 	
              0

            	 	 	
              22,500

            	 	 	
              22,500

            	 	 	
              11,250

            	 	 	
              11,250

            	 	 	
              0

            	 	 	
              22,500

            	 
	
              12/07/06

            	 	 	
              40,000

            	 	 	
              0

            	 	 	
              0

            	 	 	
              40,000

            	 	 	
              20,000

            	 	 	
              10,000

            	 	 	
              10,000

            	 	 	
              40,000

            	 
	 	 	 	
              145,000

            	 	 	
              30,000

            	 	 	
              42,500

            	 	 	
              72,500

            	 	 	
              41,250

            	 	 	
              21,250

            	 	 	
              10,000

            	 	 	
              72,500

            	 


    

     

    
      	
              Fuel
                Tech, Inc.

            
	 	 
	
              By:

            	 
	 	
              John
                F. Norris Jr.

            
	 	
              President
                and CEO

            
	
              Agreed
                to and accepted, this 30th Day of April, 2008.

            
	 	 
	 	
              Vincent
                J. Arnone